Existing electronic payment mechanisms require a substantial level of trust among all the participants (typically banks) and require that all of the participants observe common procedures, including fees. The dependence on global trust and procedures is fundamental, for example:                To ensure that payment orders are not submitted multiple times (via different paths).        To ensure authenticity and validity of payment orders.        To provide fair sharing of costs and profits.        
Existing mechanisms generally have some technical means designed to address these concerns. For example, credit card systems attempt to detect and discard duplicate credit card charges that are created when a clerk innocently sweeps a magnetic card through a reader multiple times. Such systems also attempt to recognize atypical purchase behavior, such as credit card purchases made in different locations at closely-spaced times, and to require additional authentication or deny such transactions. These mechanisms still depend on trust, for instance, that the clerk did not intentionally sweep the card twice with different amounts. They also require centralized, global control, in order to approve transactions and to identify atypical behavior.
The requirements of common trust, fees and procedures result in rigid, non-competitive mechanisms. For example, in credit card networks, new processors (typically retail vendors) must be audited and approved by the network operator. All processors must rigidly follow the procedures established by the network operator, or risk being unable to collect on a credit card payment that they have received. These are time-consuming, expensive processes. Furthermore, because the entire system is controlled by the network operator, buyers having one brand of credit card cannot buy from sellers who are authorized only to receive another brand.
More traditional payment mechanisms do not use a commercial authority, instead relying on the legal system to provide approval and audit controls. For example, in the United States, a new bank can get a charter, set up a correspondent banking relationship with an existing bank, and immediately start participating in the paper check payment mechanism by issuing and receiving checks. This network of correspondent relationships between banks is known as a clearing network. When a customer of one of the banks deposits a check drawn on another bank in some distant location, the check is routed from one corresponding bank to another until it reaches the bank on which the check is drawn. At this point the check is cleared, and funds are transferred. This mechanism takes advantage of the fact that physical checks cannot be deposited multiple times, as well as on protection afforded by government regulation against bank fraud. The funds are finally credited to the depositor's account only after the check has cleared all of the intermediary banks along the way.
The processing of checks in the banking system is an example of conservative clearing, in which each intermediary clears a payment only after the next intermediary has cleared it. All existing mechanisms for handling electronic payment orders also use conservative clearing, as a trivial solution for prevention of duplicate deposits. Conservative clearing, however, requires common agreement and trust. The only existing clearing mechanisms that do not use conservative clearing are for payments using physical means that cannot be duplicated, such as cash, traveler checks and bank notes, or the electronic equivalent-stored value cards. Banks generally make exceptions to their conservative clearing procedures only for certified checks issued by another bank that they trust.
In recent years, mechanisms have been developed and proposed for enhancing security of electronic transactions. Digital signature methods are described, for example, in U.S. Pat. No. 4,405,829, whose disclosure is incorporated herein by reference. The European Commission has initiated the SEMPER project (Secure Electronic Marketplace for Europe) as a part of its ACTS Program (Advanced Communications Technologies and Services) to develop secure electronic commerce over open networks, especially the Internet. Information regarding SEMPER is available at http://www.semper.org/. One of the issues addressed in the SEMPER framework is the problem of resolving disputed electronic payments, as described, for example, by Asokan et al., in a paper entitled “Towards A Framework for Handling Disputes in Payment Systems,” published in the Proceedings of the 3rd USENIX Workshop on Electronic Commerce (Boston, August-September 1998), which is incorporated herein by reference. This paper presents a language for expressing dispute claims in a unified manner, and an architecture for resolving such disputes. Claims are supported with evidence tokens, whose use is illustrated in the paper based on an example payment system.